"We don't own the world… we borrow it from our children."

That statement, from an environmentalist at the Texas State Fair, came to mind as I listened to William G. Shipman, talk about reforming Social Security last week.

"It was the third rail of politics two years ago.", he said.

" Now, not putting out a reasoned solution will be a political third rail. The climate of opinion has unequivocally shifted."

Mr. Shipman ( with Marshall N. Carter) is the author of "Promises To Keep: Saving Social Security's Dream." Regardless of who wins the election, he believes that the next President of the United States is going to find a need to touch… and probably walk… that third rail.

One bit of evidence is that both Democrats and Republicans are now starting to talk about plans to privatize a portion of Social Security, a notion that would have won immediate membership in the libertarian party as recently as five years ago.

What caused the change?

Repeated failure of temporizing tax fixes. Not once, not twice, but a seemingly endless series of tax increases that has materially changed the tax burden workers now face… even as their faith in future benefits has diminished.

Let me demonstrate in personal terms.

When I graduated from college in 1962 my starting salary was $6,000 and the employment tax was 3.125 percent of the first $4,800 of wages, a maximum of $120. The tax stopped being withheld in October. I looked forward, every year, to the week when my paycheck would increase because the employment tax was no longer being deducted.

With many others from that period, I judged my economic progress by what month the tax stopped coming out of my paycheck. At age 30, working as a management consultant, the tax stopped coming out of my paycheck in late June. I was one proud dude.

Today my wife and I have four adult children, a daughter-in-law, and a son-in-law. They range in age from 22 to 32. They pay 7.65 percent of their income for employment taxes and have been working for years. Not one of them has ever experienced a paycheck without the employment tax. All but one would have to double their income, or more, to hit the current $62,700 wage base maximum. The idea of not paying the tax by June is an impossible dream.

For them, Social Security is a permanent, high, and rising tax that reduces their ability to spend or save… yet they know the system is likely to have dramatically reduced benefits when they retire in 2030 or later. The most common estimate is a minimum of a 30 percent reduction in benefits from the current formula. The alternative is an employment tax over 20 percent for a grandchild on the way.

That is what's rolling toward us.

Mr. Shipman has put forth one of several proposals to solve the problem by giving workers a chance to save a portion of their employment taxes in real investments instead of committing them to fund political promises. He has structured his proposal to make certain that promises to today's' elderly are not broken while younger workers have a chance at actually improving on what they might receive from Social Security. And he warns, as many others do, that unless the current system is changed, promises to both the young and the old will be broken.

This is a pivotal issue. It is more important than anything either presidential candidate debated and it deserves far better treatment than the disgusting political advertisements we have seen on television. Fortunately, there are now two short books on the subject that give clear, balanced views. You can learn the basics in just over 200 pages from either book.

One is Mr. Shipmans.'

"Promises To Keep" is divided into two sections. The first is an overview that provides a capsule education on the idea of retirement and different retirement plans. The second section outlines his plan for maintaining the security of current Social Security recipients while providing for the security of future retirees. The book, just out, is available as a $24.95 paperback by Regnery.

The other book is by Peter G. Peterson. "Will America Grow Up Before It Grows Old?" Although subtitled "How the Coming Social Security Crisis Threatens You, Your Family, and Your Country" ( Random House), this is not an alarmist book. Nor is it hopeless. It simply lays out how and why the Social Security system will collapse if we don't deal with the problem.

As the man at the Texas State Fair said, "We don't own the world… we borrow it from our children."

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File Name: 961103SUDallas Morning News file date: 11/03/96---SUNUniversal Press Syndicate file date: same

 © Dallas Morning News, Universal Press Syndicate, 1996